Developers 'misled investors', court told

A class action has been launched in the Federal Court against two developers, accused of allegedly misleading investors on the New South Wales central coast.

The law firm Morris Blackman is representing 46 investors who bought holiday units in the Pacific International Resort at The Entrance about eight years ago.

The investors say developers Landillo and Austcorp, and two real estate agents, guaranteed them a return of up to 8 percent for 10 years, and that the guarantee was crucial because they borrowed money to pay for the units.

They are arguing they were misled because the contracts had a hidden clause that guaranteed returns for only 12 months.

The investors say they have been left with overpriced units they cannot sell and want compensation for their financial loss.

Austcorp has issued a statement saying the action is without foundation.